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A Promising Forecast

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Publication

Global Gaming Business

Written By

Frank J. Fahrenkopf, Jr.

As I look back on what amounted to an exceptionally challenging year, I cannot help but feel a strong sense of optimism. To be sure, 2009 was a year unlike any the gaming industry has ever faced. As the nation grappled with the most severe economic downturn in decades, consumer discretionary spending and confidence declined dramatically, leaving our industry – and many others like it – bruised and battered.

But, in the midst of these difficulties, the gaming industry continued to seize new opportunities whenever they surfaced. Despite slashed budgets and depleted workforces, we found myriad ways to do more with less. As a result, our industry is now stronger and better equipped to face whatever obstacles the coming year might have in store.

For example, as controversy over business travel swirled in Washington earlier this year, the gaming industry found itself in the glare of the media spotlight more so than ever before. The industry capitalized on the opportunity to expand its national presence and renew its commitment to educating senior political leaders about the benefits of gaming.

In September, the American Gaming Association (AGA) hosted its first-ever fly-in event, which convened the most influential gaming leaders in Washington for two days. The event provided them with unprecedented access to more than 50 national policymakers, including every member of the House and Senate leadership from both sides of the aisle. Gaming leaders reminded legislators that our industry is a vital contributor to many state and local economies, providing good-paying jobs and opportunities for local businesses.

September also saw the launch of a Web-based tool to further the industry’s federal legislative agenda. The new online AGA Gaming Advocacy Center features useful resources – such as sample letters and talking points – and encourages gaming industry stakeholders to call, write or e-mail their respective members of Congress about important policy issues.

Throughout the year, the industry won several important legislative victories. The AGA worked with its member companies and allies in Congress to ensure the gaming industry was included in provisions of the stimulus bill allowing allowing companies to defer tax payments on income from the repurchase of debt and to deduct portions of the cost of new equipment purchases or upgrades in the first year of service. These provisions provided some relief for struggling companies. Also, the AGA joined forces with its travel industry partners to lobby for passage of the Travel Promotion Act, which, at press time is awaiting final approval.

Also in 2009, as the gaming industry continued to expand – both domestically and internationally – the AGA found new ways to keep industry professionals better connected.

June saw the launch of AGA SmartBrief, a daily e-newsletter designed to keep gaming representatives better informed of the latest industry news. Using proprietary technology, editors of AGA SmartBrief distill and disseminate the most critical news stories, free of charge, to more than 6,400 subscribers every day. In October, the AGA surveyed SmartBrief subscribers about the industry’s current and future prospects, yielding many valuable insights.

In addition, the AGA continued to promote business networking opportunities among industry professionals through its Global Gaming Expo (G2E) family of events. G2E 2009, which took place in Las Vegas last month, was a tremendous success, attracting more than 25,000 attendees from all over the world. In addition to showcasing the latest industry trends on its exhibition floor, G2E offered attendees three full days of outstanding educational programming.

Likewise, the third annual G2E Asia once again convened attendees from every corner of the Asian gaming market to share new ideas and best practices. And, recognizing the immense potential of the burgeoning Latin American gaming sector, the AGA developed a partnership with Monografie this year to jointly sponsor SAGSE, the premier gaming business event in the region.

Also this year, the gaming industry identified several new opportunities to share its critical responsible gaming message. The National Center for Responsible Gaming (NCRG) – the AGA’s affiliated charity – joined forces with the G2E Online Education Center and International Gaming Technology to launch the NCRG Webinar series. This new resource brings cutting-edge programming on gambling disorders and responsible gaming to the desktops of health care providers, researchers and gaming industry professionals free of charge.

And, in September, the NCRG announced the official recommendations of the national Task Force on College Gambling Policies, which was created by the Division on Addictions at Cambridge Health Alliance, a teaching affiliate of Harvard Medical School. The Task Force recommendations provide a solid, science-based framework colleges and universities across the country can use to address gambling and gambling disorders on campus.

The accomplishments I have discussed here are only some of the gaming industry’s many successes in 2009. It is truly remarkable that we have managed to achieve so much, even while facing severe economic turbulence.

Thankfully, the turbulence may begin to dissipate in the coming months. Recent revenue figures suggest that the industry may be turning a corner.

Throughout 2009, gross gaming revenues have been consistently depressed; every month, they have lagged significantly behind 2008 figures. Gaming revenues for the third quarter totaled $7.94 billion, a 5.5 percent decrease from the same period in 2008.

However, gross gaming revenues for September were down only 1.8 percent from 2008 figures – a far less substantial decrease than in other months. Whether these individual data points can be classified as a legitimate trend remains to be seen.

Still, if the economic downturn has taught us anything, it’s that fortunes can change abruptly. Nevertheless, if this trend continues, 2010 will have more bright spots than 2009.

Ultimately, I believe the future is bright for the gaming industry. Our achievements this year – managed despite considerable adversity – clearly demonstrate that ours is a uniquely innovative and adaptable industry. Armed with important lessons learned in 2009, we stand ready to face whatever challenges the coming year has to offer.